Saint John's Cmtys. v. City of Milwaukee, 2020AP1696

CourtUnited States State Supreme Court of Wisconsin
Writing for the CourtANNETTE KINGSLAND ZIEGLER, C.J.
Citation2022 WI 69
PartiesCOMPLETE TITLE: Saint John's Communities, Inc., Plaintiff-Respondent-Petitioner, v. City of Milwaukee, Defendant-Appellant.
Docket Number2020AP1696
Decision Date22 November 2022

2022 WI 69

COMPLETE TITLE: Saint John's Communities, Inc., Plaintiff-Respondent-Petitioner,
v.

City of Milwaukee, Defendant-Appellant.

No. 2020AP1696

Supreme Court of Wisconsin

November 22, 2022


ORAL ARGUMENT: October 6, 2022

Circuit Court Milwaukee County L.C. 2020CV578 Jeffrey A. Conen Judge

REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 399 Wis.2d 729, 967 N.W.2d 151 PDC No: 2021 WI.App. 77 - Published

For the plaintiff-respondent-petitioner, there were briefs filed by Alan H. Marcuvitz, Andrea H. Roschke, and von Briesen & Roper, S.C., Milwaukee. There was an oral argument by Alan H. Marcuvitz.

For the defendant-appellant, there was a brief filed by Allison N. Flanagan, assistant city attorney, with whom on the brief was Tearman Spencer, city attorney. There was an oral argument by Allison N. Flanagan, assistant city attorney.

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OPINION

ANNETTE KINGSLAND ZIEGLER, C.J.

¶1 This is a review of a published decision of the court of appeals, Saint John's Communities, Inc. v. City of Milwaukee, 2021 WI.App. 77, 399 Wis.2d 729, 967 N.W.2d 151, reversing the Milwaukee County circuit court's[1] order denying the City of Milwaukee's ("City") motion to dismiss Saint John's Communities' ("Saint John's") action for recovery of unlawful taxes under Wis.Stat. § 74.35 (2019-20).[2]

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The court of appeals reversed, concluding that Saint John's § 74.35 claim was procedurally deficient because Saint John's did not first pay the tax before filing its claim. We affirm.

¶2 Saint John's argues that it properly filed a claim for recovery of unlawful taxes according to all procedures required under Wis.Stat. § 74.35. According to Saint John's, § 74.35 contains no requirement that taxpayers first pay the challenged tax prior to filing a claim for recovery of unlawful taxes against the City. It argues that the only temporal requirements are that taxpayers both pay the challenged tax and file the claim by January 31 of the year in which the tax is payable. As a result, Saint John's argues that the circuit court properly denied the City's motion to dismiss, and that the court of appeals erred in reversing that decision.

¶3 We conclude that Saint John's claim for recovery of unlawful taxes was procedurally deficient. According to Wis.Stat. § 74.35(2)(a), "[a] person aggrieved by the levy and collection of an unlawful tax assessed against his or her property may file a claim to recover the unlawful tax against the taxation district which collected the tax." The plain language of this statute requires Saint John's to first pay the challenged tax or any authorized installment payment[3] prior to

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filing a claim. If Saint John's has not yet paid the tax, then Saint John's is not "aggrieved by the levy and collection of an unlawful tax," and there is no paid tax to "recover." Saint John's did not make any payment of the challenged tax before it filed its § 74.35 claim. Therefore, Saint John's § 74.35 claim was procedurally deficient, and the circuit court erred in denying the City's motion to dismiss. We affirm the court of appeals' decision.

I. FACTUAL BACKGROUND AND PROCEDURAL POSTURE

¶4 The relevant facts are not in dispute. Saint John's owns an age-restricted continuing care retirement community located on a single parcel in the City of Milwaukee (the "Property"). For tax years 2010 through 2018, the City recognized the Property as fully exempt from property taxation under Wis.Stat. § 70.11.

¶5 In 2018, Saint John's began a project to renovate and expand the Property. Saint John's built new facilities in an area of the Property previously used for parking, and it demolished its existing facilities. In 2019, the City Assessor determined this was a new use of the Property and notified Saint John's that the City no longer considered the Property to be tax-exempt.[4]

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¶6 On November 8, 2019, Saint John's filed a claim to recover unlawful taxes pursuant to Wis.Stat. § 74.35. The City informed Saint John's that its claim was premature because the City had not yet levied the tax, and because Saint John's had not yet paid the challenged tax and was therefore not "aggrieved by the levy and collection of an unlawful tax" under § 74.35(2). The City levied the tax on November 27, 2019. Saint John's filed a second § 74.35 claim on December 5, 2019, the same day the City issued the 2019 property tax bill to Saint John's. At this point, Saint John's still had not paid the challenged tax.

¶7 At the recommendation of the City Attorney, the City disallowed Saint John's claim on January 21, 2020, because Saint John's did not pay the challenged tax prior to filing its Wis.Stat. § 74.35 claim. The next day, Saint John's paid the first installment of its 2019 property tax bill.

¶8 On January 22, 2020, Saint John's commenced this lawsuit against the City, alleging claims under Wis.Stat. §§ 74.35, 74.33, 74.41, the Uniformity Clause of the Wisconsin Constitution, and 42 U.S.C. § 1983. The claim involving Wis.Stat. § 74.35 is the only claim before us.

¶9 On February 7, 2020, the City filed a motion to dismiss Saint John's lawsuit for failure to state a claim upon which relief can be granted. See Wis.Stat. § 802.06(2)(a)6. The City argued that Saint John's Wis.Stat. § 74.35 claim for recovery of an unlawful tax was procedurally deficient because Saint John's did not first pay the tax before filing its claim. Saint John's argued that its claim was not procedurally

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deficient because there is no requirement in § 74.35 that the tax be paid before filing a claim. In a written decision dated August 5, 2020, the circuit court denied the City's motion in part.[5]

¶10 On April 9, 2020, before the court issued its written decision denying the City's motion to dismiss, Saint John's filed a motion for partial summary judgment on the merits of its claim. Saint John's argued that the property tax was unlawful because the Property was tax-exempt, and that Saint John's was not required to submit a new exemption application. The City opposed the motion, arguing that Saint John's failed to timely file an exemption application. On September 8, 2020, the circuit court held a hearing on the motion and granted partial summary judgment in favor of Saint John's based on its claims under Wis.Stat. §§ 74.35(1) and 74.33(1)(c), ordering a refund of the 2019 taxes with interest. The circuit court issued a written order to this effect on September 24, 2020.

¶11 The City appealed both the August 5, 2020 order denying the City's motion to dismiss and the September 24, 2020 order granting partial summary judgment to Saint John's. The court of appeals reversed the circuit court's order granting partial summary judgment and remanded the matter to the circuit court with direction to grant the City's motion to dismiss in full. Saint John's Communities, Inc., 399 Wis.2d 729, ¶27.

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The court of appeals reasoned that the City's motion to dismiss should have been granted because Saint John's filed its claim without first paying the challenged tax, making the claim procedurally deficient. Id., ¶26.

¶12 Saint John's petitioned this court for review of its claim under Wis.Stat. § 74.35, which we granted.

II. STANDARD OF REVIEW

¶13 In this case, we review a motion to dismiss for failure to state a claim. "Whether a complaint states a claim upon which relief can be granted is a question of law for our independent review; however, we benefit from discussions of the court of appeals and circuit court." Data Key Partners v. Permira Advisers LLC, 2014 WI 86, ¶17, 356 Wis.2d 665, 849 N.W.2d 693. "When we review a motion to dismiss, factual allegations in the complaint are accepted as true for purposes of our review. However, legal conclusions asserted in a complaint are not accepted . . . ." Id., ¶18 (citation omitted).

¶14 This case also presents a question of statutory interpretation. "Interpretation of a statute is a question of law that we review de novo, although we benefit from the analyses of the circuit court and the court of appeals." Est. of Miller v. Storey, 2017 WI 99, ¶25, 378 Wis.2d 358, 903 N.W.2d 759. "[S]tatutory interpretation 'begins with the language of the statute. If the meaning of the statute is plain, we ordinarily stop the inquiry.' Statutory language is given its common, ordinary, and accepted meaning, except that

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technical or specially-defined words or phrases are given their technical or special definitional meaning." State ex rel. Kalal v. Cir. Ct. for Dane Cnty., 2004 WI 58, ¶45, 271 Wis.2d 633, 681 N.W.2d 110 (citations omitted) (quoting Seider v. O'Connell, 2000 WI 76, ¶43, 236 Wis.2d 211, 612 N.W.2d 659). "[S]tatutory language is interpreted in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results." Id., ¶46. Additionally, "[s]tatutory language is read where possible to give reasonable effect to every word, in order to avoid surplusage." Id. "Where statutory language is unambiguous, there is no need to consult extrinsic sources of interpretation, such as legislative history." Id.

III. ANALYSIS

¶15 On appeal, Saint John's argues its Wis.Stat. § 74.35 complaint properly stated a claim and that all procedural requirements under § 74.35 were met. According to Saint John's, § 74.35 contains no requirement that a taxpayer must first pay the tax prior to filing a recovery claim against the taxation district. Saint John's argues that the only temporal requirement is that the tax be "timely paid," that is, by January 31. We disagree. We conclude that the plain language of § 74.35 requires a taxpayer to pay the challenged tax prior to filing a claim for recovery of unlawful taxes against a taxation district. Because Saint John's did not pay the

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challenged tax prior to filing its claim, Saint John's claim was...

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